Beijing’s lower costs of importing crude are an unintended consequence of the restrictions on Russia, Iran, and Venezuela, the outlet has said
China has managed to save billions of dollars this year through record imports of discounted crude oil from countries under Western sanctions, according to a Reuters report based on data from ship-trackers and traders.
According to the outlet, purchases from Russia, Iran, and Venezuela have likely helped Beijing save about $10 billion as international crude prices have surged since July due to tightening supply.
“An unintended consequence of sanctions imposed by the United States and others on Russia, Iran and Venezuela has been to lower the oil import costs for refiners in top economic rival China, which often criticizes such ‘unilateral” penalties,’ Reuters noted.
China imported a record-high volume of 2.765 million barrels per day (bpd) between January and September from the three major oil exporters under sanctions, the outlet said, citing ship-tracking data from Kpler and Vortexa.
Chinese importers would have paid nearly $10 billion more by purchasing similar oil grades from non-sanctioned producers. While the savings are a fraction of China’s overall oil import bill, they matter for independent refiners, the so-called ‘teapots’ that are “opportunistic buyers and actively look for bargains,” according to Kang Wu, global head of demand research at S&P Global Commodity Insights.
Crude supplies from Moscow, Tehran and Caracas have squeezed out alternatives from the Middle East, West Africa, and South America and accounted for a quarter of China’s imports in the first nine months of this year, up from about 21% last year and double the 12% share in 2020, data showed.
Despite higher oil prices and shrinking discounts on Russian crude to global benchmarks, Russia remains the single biggest oil supplier to China, the world’s top crude importer, edging out Saudi Arabia.
According to Chinese customs data, deliveries of Russian crude to the country surged by 25% in the first eight months of the year in annual terms and amounted to 71.2 million tons as Western sanctions prompted Moscow to redirect its export flows from the EU to India and China.
